The Minister for Children, Young People and Families (Dawn Primarolo): I beg to move,

I remind the Committee that section 21 of the Children and Young Persons Act 2008 requires local authorities to pay a higher education bursary to care leavers who are over 18 years of age—they are referred to in the Children Act 1989 as “former relevant children”—who go on to pursue a course of higher education. The draft regulations set out the arrangements for the payment of the bursary and deliver the commitment that was made during the passage of the 2008 Act. There was some debate on the bursary at that time.

The regulations provide for four aspects of the arrangements. First, they set the amount of the bursary at £2,000 in total for each eligible young person; secondly, they prescribe the meaning of higher education; thirdly, they specify the arrangements for the timing of payments of the bursary, whether it is paid as a lump sum or by instalments; and finally, they specify the circumstances in which payments can be withheld or recovered by the local authority.

The bursary will ensure that those care leavers who go on to higher education receive additional financial assistance to support them, removing a barrier to greater participation. Currently, only 7 per cent. of such young people aged 19 or over go on to higher education and the Government want participation rates to improve by tackling the financial disadvantage faced by many students from care backgrounds.

Research by Professor Sonia Jackson published in 2005 indicated that students from a care background tend to leave university with an average of £2,000 more debt than their peers. Although many local authorities already exercise their discretion to provide financial support to care leavers who pursue higher education, by placing this duty on them to pay eligible care leavers a £2,000 bursary, we will ensure that no care leaver faces such a financial disadvantage in future.

In drafting the regulations, we have been at pains to ensure that the arrangements for the payment of the bursary are as straightforward as possible. We have therefore aligned the meaning of higher education for the purpose of determining eligibility for the bursary with the definition in regulations made under section 22(1) of the Teaching and Higher Education Act 1998, which is used for determining eligibility for other types of financial support for students. We have also ensured that the payment arrangements set out in regulation 4 are as flexible as possible, to keep bureaucracy to a minimum and to ensure that the arrangements are determined by reference to the particular needs of the young person.

It is clear from the overwhelmingly positive response to the Department for Children, Schools and Families consultation on the draft regulations that they are very widely welcomed. Ninety-one per cent. of those responding said that the regulations were clear, and the majority—55 per cent.—said that the arrangements for payments gave the right level of flexibility to local authorities and young people to decide the most suitable arrangements for the timing and amount of payments.

When respondents took the opportunity to comment on the regulations, many of the points related to the arrangements for the timing of payments. It was clear that people saw flexibility as a key factor in maximising the benefits of the bursary. The draft regulations on which we consulted already provided for full flexibility in that respect, but we have taken the opportunity in the explanatory notes to underline the point that bursaries can be paid either as a lump sum or by instalments. That will be entirely for young people to arrange with the local authority, based on what is agreed as part of their pathway plan and what is best for them.

Andrew Mackinlay (Thurrock) (Lab): I welcome the draft regulations—I make that quite clear. Before the Minister concludes, can she tell us when the consultation period finished and what the gap was between the close of consultations and bringing the regulations before Parliament? I shall be candid through you, Mr. Chope, that my concern is about the Government repeatedly bouncing legislation through and giving minimal notice to Members of Parliament, when there could be a much longer time frame in which the final document is before us. Consideration could be given in greater depth by Members of Parliament, who would have an opportunity to consult. Candidly, that is why I ask. I want to know when the regulations were signed off in the Department and if there was a significant gap between that and the close of consultation. What was the reason for the delay?

Dawn Primarolo: I am sure that my hon. Friend will bear with me as a Minister who has only recently taken up the portfolio. I remind him that when the Bill—now the Act—was discussed, all parts of the House welcomed this. Hon. Members focused particularly on questions of flexibility and there was some discussion of the amount. The matter was not contentious. I do not know the full length—I think it would have been three months—but the consultation ended on 1 June 2009. That enables us to bring the regulations into force for September 2009. As my hon. Friend might know, they are backdated for anyone who was eligible on 1 September 2008. Before my hon. Friend rises again, I can confirm—if that is what he was going to ask—that the money has already been allocated to local authorities to ensure that the extra financial commitments can be met. I am happy to respond to further questions at the end of the debate.

Regulation 4(4) was amended in response to the consultation to make it clear that local authorities must, as far as is reasonably possible, consult the young person and give due consideration to his or her wishes and feelings before a decision is made about the payment of the bursary. Only two limitations are placed on the timing of payments and those are minimal. The first is when the young person and local authority agree that it would be more appropriate to pay the bursary in a lump sum. In that case, we have prescribed that it should be paid by the end of the first term, which we believe is a sensible arrangement that will ensure no undue delay in the payment. The second limitation, should the agreement be for the bursary to be paid in instalments, is that the first instalment must be paid during the first term of the course. The regulations do not therefore set out any requirements about the amount of each instalment or the number of instalments. As long as the final instalment is paid before the end of the final year of the course, we believe that it is for the young person and the local authority to agree upon the most useful way to provide support to meet individual needs.

The regulations build on existing provisions under section 23C of the Children Act 1989, which sets out the powers and duties of local authorities in relation to, as I mentioned earlier, young people who are designated as former relevant children. Section 23C(4)(b) places the local authority under a duty to give assistance to a former relevant child to the extent required by his welfare and his education or training needs.

The level of support provided varies widely between local authorities. Some pay a grant to care leavers who go on to higher education, while others do not. Through “Care Matters” funding, we have provided additional resources to local authorities through their area-based grant. The higher education bursary regulations will reduce the differential by providing an additional obligation on local authorities to provide important financial support.

Tim Loughton (East Worthing and Shoreham) (Con): I add my welcome to you to the Chair, Mr. Chope, and congratulate you on your precision timing in arriving for the beginning of the proceedings.

We welcome the measures. The Minister is right that, when I was involved in the Children and Young Persons Bill, which became an Act last year, the subject under discussion had cross-party consensus, and the fact that something was going to be done was welcomed. The problem that the measures seek to address is serious. The Minister mentioned that a Department for Children, Schools and Families survey found that only 7 per cent. of 19-year-olds from care backgrounds are in full or part-time higher education. The explanatory memorandum mentions a figure of, I think, 6 per cent. while other estimates put it lower. That compares with a Government target of getting 50 per cent. of people into university and higher education, so the gap of achievement in higher education between looked-after children and children as a whole is woefully large.

The gap in achievement in other educational qualifications is also woefully large and widening. In 2008, the number of looked-after children achieving five A to C GCSEs improved from about 8 per cent. to 13.9 per cent. That is a good improvement, but it must be compared with the improvement of children as a whole. That improvement includes looked-after children, which dilutes the figures, but it went up from around 51 per cent. to 62 per cent. The gap has therefore gone from 42 or 43 percentage points to 49 percentage points, which is the statistic that we need to address. Unless we do more to address the deficit of outcomes for children in care, they will not have the qualifications to enter higher education.

Although we welcome what is being done to encourage those who might be qualified to go to university, but choose not to, or are deterred from doing so, because of finances, we must look just as urgently at ways of improving the educational outcomes of children in care to enable them to be in a position in which they can consider going to university because they have the right academic qualifications. It is important to note that the issue cannot be seen in isolation; it is part of a greater whole and needs to be given urgent attention.

Although we welcome the proposals, I would like to ask some straightforward questions. Why did the Government decide upon the financial bursary scheme as their preferred option, and how did they come up with a specific figure? Certain local authorities operate other schemes. Dorset, for example, gives a bursary of £500 to children in the care system for extra-curricular activities, such as music lessons or additional sports involvement. That is welcome, because looked-after children miss out on so many of the additional activities for which mum or dad would normally fork out if they were in a position to do so. Such funding is too often not available. There is good evidence of bursaries being used lower down the age scale, but I wonder what other options were considered.

Why was the figure of £2,000 chosen? The Minister mentioned the research by Professor Sonia Jackson, and that figure was chosen, I think, because that research showed that children in care had debts that were £2,000 higher when they left university. That research is now four years old, and various things have happened with student maintenance grants and the freezing of them. Is the Minister therefore still satisfied that the figure is right? How will it be increased, decreased, frozen or whatever in years to come? Will it be indexed? Will there be any standard formula, or will it be regularly reviewed? What ongoing research will she want to see to ensure that that figure continues to be the right figure to encourage young people to go on to university? Has she set herself—not that I am in favour of targets—any sort of target that she would hope to reach for young people in care going on to university or higher education, in order to show that the mechanism has proved its worth?

It is not just a question of paying the bursaries. Has the Minister looked at other projects? For example, the year before last I opened the Horizons education centre in the London borough of Ealing. That is a fantastic project, which was conceived by a Labour administration and is being carried on by the current Conservative one. It has had a cross-party consensus. The centre is aimed at children in care getting extra computer training and all sorts of other support after school, and is run by young people who were in care—some in the borough of Ealing—and have gone to university and come back. Surely, they are the best young people to know the needs and sensitivities of young people in the care system.

It is therefore not a surprise that, without a bursary scheme, 18 per cent. of young people in the care system in Ealing go on to university or higher education. That is treble the figure in other parts of the country, and is the highest that I have come across, which is an enormous success. Perhaps the Minister will comment on how she, or her Department, has looked at other operations that are achieving, without the bursaries, what the regulations are supposed to achieve, and on how that best practice can be replicated more urgently in other parts of the country.

The Minister said, I think, that the scheme will be backdated to September 2008. Presumably, therefore, the £2,000 level will apply both to a year ago and to the beginning of term in a few months’ time. What happens to those people who started university last year but have dropped out? Will they be eligible for part of the bursary for the time they spent at the university or the place of higher education? How will the scheme apply in future to those students who do not complete their course? That will be particularly relevant when deciding whether the grant should be paid out in a job lot at the beginning of the academic year—in which case it would be a question of being able to reclaim it if that were deemed to be the desirable action—or in instalments, which could then just stop.

I gather that that decision is to be left to the local authorities. What sort of considerations, therefore, does the Minister think that local authorities will want to look at? From a cash-flow point of view, I would have thought that every local authority would automatically want to pay the bursary in instalments, so that they kept hold of the cash for longer. Will the decision be geared not to the cash-flow preferences of a local authority but to whether it thinks a young person will blow the whole lot in their first month in the union bar, or on whatever students we may have known in our time have a predilection for? It would be useful to have some guidance on how local authorities are expected to deal with that.

There is a question about age limits and who qualifies. An example would be somebody who has come into the care system at the age of 17 and a half and has been in care for literally a few months. They may be in the last term of their career at school and find themselves, for whatever reason, in the care of the local authority and likely to remain in its care. Do they qualify for the full amount on the same basis, or do they need to have been in the care system for a qualifying number of months or years?

What about those children who have been taken into the care system, have already been assigned a university place and go to university as a child in care, but who then, halfway through their education, are no longer in the care system and are the responsibility—although over the age of 18—of their birth parents? That will not affect a lot of people, but there are questions about the flexibility of those young people coming in and out of the care system, which of course an awful lot of young people do.

There is also the question of those relevant children who are over the age of 21—not between the ages of 18 and 21, which would be the normal constituency of children who are care leavers and who qualify for this bursary—who are still receiving support from a local authority for education and training, and who will be former relevant children until the end of their programme of study. That particularly applies to young people with disabilities—perhaps with a learning disability. Does that mean that a young person who is over 21 and receiving higher education—on account of various disabilities that make them still a qualified former relevant child—will still be able to claim the grant? There are a number of young people with particular educational requirements and disabilities who will qualify for this bursary. How will young adults, who have left care at the age of 18 or 21, be notified that they are entitled to this bursary?

I have a few more concerns. Presumably, this money can be used for anything that the student wants—he or she can blow it all in the union bar, or use it for books and other more worthwhile things. What about students who go to an overseas university? Will the provision apply equally if a student gets a place at an equivalent university in the EU or America?

Finally, the Minister referred to section 23 responsibilities. Can she give some guarantees and assurances that the grant will not take away from local authorities’ section 23 responsibilities? Local authorities must not be able to claim that the bursary covers costs that they might otherwise be obliged to provide for: housing assistance and so on. It must not be a case of giving with one hand and taking away with another. If she could give that guidance, it would send a useful message to local authorities as to how the provision should be applied uniformly to all people who have qualified for it.

I would be grateful for the Minister’s response to those particular and more detailed points, but we very much welcome the thrust of this measure. We hope that it leads to a greater take-up of higher education by suitably qualified children from the care system who have great potential to take advantage of higher education and university courses, but have been deterred from doing so purely because of unfair financial measures and because they cannot rely on the bank of Mum or Dad, as many of our children may have, or may be able to in years to come.

Mr. David Laws (Yeovil) (LD): I also welcome you. Mr. Chope, to the Chair.

I thank the Minister for her description of the purpose of the regulations. We also broadly support the intention behind the regulations. I draw attention, as the hon. Member for East Worthing and Shoreham did, to the explanatory memorandum, which includes a lot of striking information about the gap that there is between the educational experience of young people in care and that of the average young person not in a care setting. Only 13 per cent. of looked-after children gain five GCSEs at grades A* to C, compared with almost two thirds of all children. The hon. Gentleman also mentioned that just 6 to 7 per cent. of care leavers go on to university.

All of us would want be honest about the likely impact of the proposals. By themselves, the proposals are likely to have a modest impact on those figures. We will have to do a lot more further down the education system to address the gap between the performance of children in care and the rest of the children population—not just for those children who go into care early on in their lives, but for those who go into care in their teens, who are also overwhelmingly likely to have had a poor experience of education and poor educational support in the home environment, and therefore to have already fallen behind in terms of their educational performance. The attempts to challenge educational disadvantage further down the education system are likely to have more impact on the life chances of that group of young people.

However, it is understandable that the Government want to do more to look after the financial interests of such young people, as the state is, in effect, in loco parentis, and also because such young people may be particularly deterred by the prospect of taking on large amounts of debt, which has to be taken on to enter higher education today. There are three issues that I want to raise on the regulations—three clarifications that we seek from the Minister.

The first is to reinforce the point that the hon. Member for East Worthing and Shoreham made in asking about the uprating mechanism for the bursary. As the Minister will know, there has been quite a high degree of concern, upset and irritation in the past couple of weeks at the fact that the Government have decided to index the level of tuition fees by what I assume is the retail prices index, but have not indexed, at the same time, the available level of grant. We need to know whether there is a clear intention on the uprating of this particular bursary, or whether, particularly in a more constrained financial environment, the bursary could be left to wither on the vine and go the same way as other pieces of Government expenditure that have been brought in over the past 20, 30 or 40 years, including the notorious 25p age addition to the basic state pension at the age of 80, which meant something to pensioners when it was introduced in the 1970s, but does not mean a lot today. We will be grateful to hear from the Minister what the uprating mechanism is going to be.

Secondly, I want to tease out from the Minister a little more about what she expects the benefits of the £2,000 bursary to be. It is clear from the regulatory impact assessment that the Government are hoping that there will be two effects. The first is to reduce the drop-out rate among the small number of children in care who presently go on to higher education—something like 400 children out of a cohort of 5,800. Secondly, the Government are hoping to encourage participation in higher education by former care leavers to increase the take-up rate.

When the Select Committee on Children, Schools and Families was taking evidence on that issue in 2007 for the report that it published on 10 March 2008, the Minister at the time said—I confess I cannot remember who it was, because there has been a degree of change in that area, as in many others—that the assumption was that the bursary would lead to a 10 per cent. increase in the number of young people in care who go to university. That is quite a small figure in relation to the number of individuals. We already know that, sadly, only 400 of the 5,800 children from the cohort go on to higher education. The Minister appeared to suggest that there would be an increase because of this proposal. However, according to the estimate of the annual costs of the measure in the impact assessment, that is based on the continuation of a trend increase of 10 per cent. in care leavers entering higher education. The Government are therefore underpinning a trend increase, rather than expecting there to be any impact from the measure.

That is interesting because we are trying to understand whether the Government support the bursary so that the individuals who have already gone into higher education are in a more comfortable financial position, which is a worthy objective, or because they think that young people who are currently in care will cease to be deterred from going on to higher education by the costs. Do the Government anticipate an improvement in the staying-on rate as a consequence of the regulations and, if so, how? The regulatory impact assessment suggests that that is likely, but as is often the way, when one probes the detail that underlies the supposedly impressive statistics, no real assumption is being made. The only reference to the staying-on rate in the impact assessment is when the Government assess that the benefits of the proposal will outweigh the costs if an additional five care leavers obtain degrees. That is a small number and I would question that economic calculation if we had more time.

Finally, I wish to ask the Minister about the Government’s wider intentions in relation to support for this group of young people. We have discussed the fact that only 6 to 7 per cent. of children in care go on to higher education. Despite the sincere best efforts of the Government and others, we can anticipate that the figure will stay low for quite a long time, if only because of the nature of the young people we are talking about. Almost by definition, they are some of the most challenged young people in the country. Of course, we all want a lot more to be done, particularly in the earlier years of education, to help such young people to stay on and to succeed at all levels of education. However, for the time being, the overwhelming majority of them will probably find it difficult to do so.

When the issue came up in the Select Committee inquiry of 2007 that I mentioned, a question raised consistently was,

The report went on:

and did not apply to other groups. National Children’s Home, which is now Action for Children, said that the bursary

The Select Committee got a somewhat sympathetic response from the then Minister and urged him to consider whether the bursary could be extended to cover a wider group of young people.

I have not had time to obtain the figures on how many children in care fall under the category of further education, vocational training or apprenticeships, but I guess that it would be more than go on to higher education. Although the Minister might well say that the financial arrangements for higher education and the other areas are rather different, I suspect that the same financial constraints and pressures on youngsters who have come out of care will be relevant. I suspect that a bursary system, or some variant of what the Government are proposing that would cover post-18 or even post-16, might be of greater value than the measure that we are discussing. Without drawing the Minister too wide of the regulations and getting you into trouble, Mr. Chope, has there been any update in ministerial thinking since the evidence session in 2007? With those questions and comments, I make it clear that we support the regulations.

Mr. Geoffrey Robinson (Coventry, North-West) (Lab): It is a pleasure to serve under your chairmanship, Mr. Chope, and doubly a pleasure to participate in a Committee with such evident cross-party support. I welcome the regulations, as I am sure every other Committee member does.

It is pretty obvious why the regulations are required. At 7 per cent., the number of children in care who go on to university is, sadly, very low. Even though the objective, or expected outcome of the proposed additional funding is to increase the number of children in care who go on to university by only 3 percentage points to 10 per cent., at a modest cost of £1 million, and even though the briefing provided with the regulations rather dolefully concludes that the regulations will be of interest to local authorities but are not likely to generate much media interest, I hope that my right hon. Friend the Minister will ensure that they are properly monitored and that we can look forward to a greater level of success than the modest level at modest cost that seems to be anticipated in the regulations.

I had a couple of other questions relating generally to those posed by other Members, but it is interesting that although the consultation was pursued over a good three months and, I imagine, covered all local authorities, in principle at any rate, only 14 replied. I do not know what proportion of the total that is—I do not have the figure to hand—but it seems low. It therefore seems that one reason for the low take-up and lack of support may be that the issue has not been treated as a priority by most local authorities.

It is also interesting—some reassurance on this point from the Minister would be helpful—that the key thing that all the local authorities wanted was maximum flexibility as to timing and amount. That is fine, subject to two provisos. First, it should not be used by backward-looking authorities to delay payment towards the end. I am sure that that would not be the case; they are more likely to advance payment as an incentive to move forward. Secondly, the payments should be genuinely additional payments. That point has been made by Opposition Members. It is important that the payments should be genuinely additional and not used to subvent or support payments that would have been made in any case.

I am sure that the Minister will be able to provide those assurances. There remains, then, only the question of how £2,000 was arrived at in the first place. That is a modest amount, arrived at, I think, on the basis of the 2008 figures. Given that the measure will become effective only in 2010, the general question of uprating must be faced sooner or later. If the Minister can give us an idea how that will be effected, the Committee will be pleased.

We wish the regulations well and hope that they will succeed beyond the wildest dreams. Considering the modest cost involved, it is one of the most cost-effective Government investments that we can make.